An Affordable Fix for Modernizing Medical Records

By

Laura Landro

Updated April 30, 2009 12:01 am ET

At Midland Memorial Hospital in Texas, nurse William Winslett used to spend hours deciphering physician's scribbled notes, filling out forms and retrieving misplaced patient charts. Worst of all was the pneumatic tube system used to shoot orders and other documents between floors -- or, at least, that was the idea.

"Sometimes the tube system was down or got stuck," recalls Mr. Winslett. As for patient charts, "sometimes we couldn't find them at all."

Dr. Lawrence Wilson reviews the new system at Midland Memorial.
Midland Memorial Hospital

In the push to digitize America's hospitals, Midland Memorial faced an all-too-common dilemma: a crying need for information technology to replace archaic paper records, but a shortage of funds to pay for it. Midland Chief Executive Russell Meyers found an unexpected freebie of sorts: the software used to power the electronic medical-record system of the Veterans Health Administration.

Created with several billion dollars in taxpayer funds over two decades and used in more than 1,400 VA facilities, the source code is in the public domain, meaning software developers around the world can freely build features into it. Add the cost of hardware and the services of a company that has adapted the VA software for commercial use, and Midland paid less than $7 million for a full electronic medical-record system.

At a time when the administration will penalize hospitals for not bringing their information technology out of the dark ages, a bright spot has emerged: free software created by the VA that still costs money to install and maintain, but often less than the offerings from private vendors. Still, the number of hospitals that have modernized is frightfully low as a host of obstacles threaten adoption of technology that could significantly reduce human error and improve care. It may also reduce costs once an initial investment -- albeit a daunting one -- is made.

Paperless technologies have revolutionized banking and retailing. But even after a decade-long effort to modernize health care, fewer than 2% of the nation's 5,000 non-VA hospitals have what could be considered a comparable full-fledged system, according to a recent survey in the New England Journal of Medicine. Hospitals say they haven't been able to afford the cost of the systems, which range from $20 million to $100 million, and the current economic crisis isn't helping.

The federal government has offered both a carrot and a stick, neither of which, some fear, will make modernization more affordable. It has earmarked nearly $20 billion in stimulus funds as an incentive for hospitals to use electronic records by 2011. And it will penalize those who don't use them, cutting a percentage of their Medicare payments starting in 2015. Once fully phased in, the penalties could amount to a loss of $3.2 million annually in Medicare funding for the average 500-bed hospital, according to a new report from PriceWaterHouseCoopers. But the incentive payments for using health information technology -- about $6 million by the fourth year for the same hospital -- are "a small carrot compared to the amount of resources it will take to deploy this technology over the next five years," the report says.

To help speed adoption, Sen. John D. Rockefeller (D., W.Va) last week introduced legislation calling for the government to create an open-source electronic health-records solution, and offer it at little or no cost to safety-net hospitals and small rural providers.

The benefits of electronic medical-record systems, regardless of their makers, are widely touted. In addition to gathering each patient's medical history in a single database, they include bar-code systems that can reduce medication errors. They use reminder and alert systems that check when a new drug is prescribed to make sure there are no allergies or unsafe interactions with another drug. They offer clinical guidelines to remind doctors to follow recommendations like making sure heart-attack patients are given a beta-blocker to prevent a second heart attack. Computerized order-entry systems can also eliminate mistakes from illegible doctor's handwriting. And they can save costs by suggesting cheaper generics when an expensive medication is prescribed.

The VA's system, dubbed VistA for the Veteran's Health Information Systems and Technology Architecture, includes those benefits and another that private commercial vendors don't have: standardization that allows hospitals to share information seamlessly. So when you break your leg in Vail, Colo., doctors there can easily retrieve your complete medical biography from your doctor in Minneapolis if both are using an open system.

Much in the same way Microsoft guards its proprietary software, commercial systems made by vendors including
McKesson Corp.
MCK -1.76%
and
Cerner Corp.
CERN -0.24%
are proprietary technology that don't always allow them to easily talk to other vendors' systems. By contrast, open source providers can share information freely and a worldwide network of software developers, WorldVistA, has emerged to offer new features, much like the community that supports the free Linux computer operating system.

But commercial vendors, noting a common complaint against open-source software that is developed by engineers here and there, say that they can provide a more reliable soup-to-nuts system and offer many features that users of the VA system have to tack on, notably billing and financial programs that commercial hospitals need to run their business.

PricewaterhouseCoopers consultant
Dan Garrett
says that while the VA software holds promise for some hospitals, it has not been widely commercially proven, unlike vendor systems. The challenge for vendors, he adds, is to offer solutions tailored to smaller hospitals or those with financial constraints.

Mike Kappel,
senior vice president of government and industry relations at McKesson, says once hospitals pay companies to deploy the VA software and the necessary service, training and upgrades it requires, the cost won't be much different than that of a commercial electronic medical- record system. Big vendors can work with hospitals to provide more reliable systems within their budget, he adds.

Many start-up companies adapting VistA for commercial use, including Blue Cliff Inc., MELE Associates Inc., Sequence Managers Software and Medsphere Inc., say their systems will still be less expensive for hospitals to deploy. Medsphere, which put together the system for Midland Hospital, says OpenVistA enables hospitals to run system checks for security problems and bugs. And Chief Executive
Mike Doyle
says the open-source software community can quickly share information and patches to fix or correct them.

Medsphere Chairman
Kenneth Kizer,
the former undersecretary for health at the VA who oversaw the development of VistA before joining the company, says its enhanced version of the software, called OpenVistA, "can be installed in one-third the time and for about one-third the cost of the big-name proprietary systems."

At Midland Memorial, doctors and nurses can retrieve patient records, lab results and X-ray images instantly. In the past, it could take hours and even days to gather them all. The system helped the hospital catch up on a $16.7 million coding and billing backlog for about 4,500 patient records in four weeks, which might have taken five or six months to do.

In the 18 months after the system went live hospital-wide in June 2006, the hospital reduced medication errors and patient deaths. Infection rates dropped 88% thanks to guidelines in the record system that prompted nurses to follow infection-control procedures, such as changing a dressing or following correct procedures when inserting a new IV.

Bed sores were also reduced as the system prompted nurses to turn patients in their beds at a set number of hours depending on their condition to prevent the sores. And Midland was able to increase by 77% its staff compliance with guidelines to care for patients on ventilators, which, if not followed, can lead to pneumonia.

There were bumps along the way. Doctors were resistant to changing the way they practiced medicine and taking the time to learn the new systems. Nurses found that entering data in the system often took more time because they couldn't skip over things they could come back to while filling out paper charts. And some employees weren't used to computers. Mr. Winslett, the nurse, says he was never much of a typist.

But after learning the new system, he has grown used to it. Most importantly, he says, "I can spend much more time with the patients."

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